The Ontario Ministry of Finance published a new consultation at the end of August on the role of preferred provider networks (PPNs) in the province’s employer-sponsored drug insurance sector.
“A PPN is an agreement between an insurer and one or more pharmacy operators to offer discounted premiums in exchange for preferential access for the pharmacies. PPNs are primarily associated with pharmacy benefits plans sponsored by employers for the coverage of specialty medicine,” the ministry writes in its call for comments, published August 23.
In the document, Preferred Provider Networks in the Employer-Sponsored Drug Insurance Sector: A consultation by the Ministry of Finance to assess the impacts of pharmacy Preferred Provider Networks on Ontario’s employer-sponsored drug insurance sector, the ministry states that insurers and employers designing benefits plans may use PPNs to contain rising costs for specialty medicine.
“By reducing premiums paid by employers, PPNs may lead to more employers sponsoring access to specialty medicine,” the paper notes as being one of the industry’s positions on the matter. “Additional analysis based on information gathered during this consultation will be required to determine whether these assessments are borne out in practice.”
The paper also discusses costs, access to medicines, quality of care and consumer choice. It examines open and closed PPNs, those which are mandatory and voluntary, and poses a number of questions for consumers, pharmacy operators, insurers and employers – including whether sponsors offer coverage for specialty medicine at all.
“This consultation aims to obtain input from diverse stakeholders to help the government better understand the role of PPNs in Ontario’s pharmacy benefits sector, learn about advantages and disadvantages of different types of PPNs and assess if any government action is required.”
Proposes three policy solutions
The consultation document goes on to propose three policy solutions, including maintaining the status quo, through to regulation using the Ontario College of Pharmacists’ proposed regulations to restrict certain PPNs that the college believes are a risk to patients.
“Currently the insurance regulatory framework does not outline any specific requirements regarding PPNs that an insurer may offer in Ontario. While existing regulations under the Pharmacy Act prohibit limitations on consumers’ choice of pharmacy without their prior consent, this does not affect PPNs as consumers are required to provide the requisite consent when enrolling in benefits plans. The Insurance Act does not contain any provisions regarding PPNs,” the consultation document states.
“Key topics of interest include the effect of PPNs on cost, accessibility, and quality of care, including but not limited to specialty medicine. The government is seeking to assess whether policy intervention is needed or appropriate.”
The 60-day public review and comment period closes October 22, 2024.